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Saudi Basic Industries Corporation (SABIC) SWOT & PESTLE Analysis

ID : 52332253| Sep 2020| 15 pages

COMPANY PROFILE -SABIC

Business Sector :Chemicals and Agrichem

Operating Geography :Global

About SABIC :

The Saudi Basic Industries Corporation (SABIC) is an incorporated Saudi Stock Company with its business activities concentrated in manufacturing, marketing and distribution of products divided into four strategic business units - Petrochemicals, Specialties, Agri-nutrients and Metals - in local, regional and global markets. These business units are mainly focused on cataloging and exploiting opportunities in the key end markets like construction, medical devices, packaging, agri-nutrients, electrical and electronics, transportation and clean energy. It is ranked among world’s largest petrochemicals manufacturers and is Middle East’s largest non-oil industrial company with 70% of the company’s shares owned by the Saudi Arabian Government and remaining publicly traded by Saudi Arabian, GCC citizens, enterprises, public and foreign financial institutions. SABIC has constructed and developed 22 industrial complexes in Saudi Arabia, owns a global technology network of 21 Research, Development and Innovation Centers, operates in more than 64 operational sites in over 50 countries on the global map with a global workforce of over 33,000 talented individuals as on January 2019.
SABIC is one of many essential industries that are fighting the Coronavirus Pandemic. As of May 2020, the company has made donations of over USD 45 million to fight against this pandemic. During this global crisis, the company focuses on three priorities: "protecting its people & communities, ensuring continued operation as an essential industry, and securing the supply of basic and critical goods." SABIC’s business strategy mainly concentrates on achieving its vision "of becoming the preferred world leader in chemicals and a true global powerhouse in the industry by delivering ‘Chemistry that Matters™’." Precisely, SABIC’s vision statement reads "Our vision is to be the preferred world leader in chemicals." SABIC's mission statement reads "Our mission is to responsibly provide quality products and services through innovation, learning, and operational excellence while sustaining maximum value for our stakeholders."
SABIC's USP or unique selling proposition lies in being the world's largest petrochemical manufacturer, the world's third-largest valuable brand in the chemical industry, and the third-largest diversified chemical company as of 2020.

SABIC Revenue :


$37.3 billion USD- FY ending 31st December 2019 (Y-O-Y growth of (negative)-20.6%)
$45.0 billion USD- FY ending 31st December 2018

Competitive Analysis of SABIC

SWOT
PESTLE
SABIC is one of the largest producers of essential products like Ethleyen glycol, polyethylene, polpolyolefins, methyl tert-butyl ether, granular urea, polycarbonate, polyphenylene and polyether imide. Clearly SABIC's diversified business model with a broad portfolio of products is the biggest strength and the core competency of company that lends SABIC a competitive advantage over its competitors.
Thus, SWOT tool helps to benchmark SABIC's business and performance along with identifying its competitive stance in the industry. The SWOT analysis manifests a discussion on all the pertinent internal and external factors specifically the strengths, weaknesses, opportunities and threats that predominate SABIC'S micro and macro environment respectively.
SABIC is the Titan of the chemical industry due to its impeccable strengths like the market leader in the manufacturing of many products, comprehensive product portfolio, robust support from the Saudi government, strong global footprint, strong R&D, focus on innovation, rigorous investments in technology and more. However factors like focus on higher volatility commodity chemicals, weak supply chain, Sublicensing overcharging issues leading to laborious associations with subsidiaries, high dependency on personnel and management teams, etc. are weaknesses of SABIC that could hinder growth, smooth functioning, and profitability of the company
Shale gas (natural gas extracted from organic-rich shale rock) is becoming the fastest-growing source of Gas in the USA and is expected to become a vital alternative source of unconventional energy globally. Thus, SABIC in working extensively on building a strong foothold in the USA in order to capitalize on shale gas opportunities. Leveraging innovation, upgrading technology, entering into fast-growing markets and improving product portfolio are a reliable source of growth opportunities and key factors to maintain a competitive edge.
Intense competition, the decline in oil and gas prices negatively influence the profits, current global health conditions due to pandemic, cyclic swings in demand and supply of petrochemicals leading to declining in profits, high dependency on the supply chain,etc. are extensive threats that negatively impact the business operations of the company.
The SWOT analysis for Saudi Basic Industries Corporation (SABIC) is presented below in a matrix followed by the detailed analysis:
Strengths
Weaknesses
1. Amongst the market leaders in production of chemicals and fertilizers
2. Strong distribution and presence across all major markets globally
1. High dependence on natural, mostly non-renewable feedstocks
Opportunities
Threats
1. Growth in petrochemical, agri-nutrients and specialties manufacturing through the way of acquisition opportunities
2. Multiple investment opportunities in United States
1. Volatile energy prices
2. Risk of climate pricing
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Detailed SWOT Analysis of SABIC

 

Strength

1. Amongst the market leaders in production of chemicals and fertilizers: SABIC is one of the global leaders when it comes to production of polyethylene, polyphenylene, polypropylene and advanced thermoplastics, glycols, methanol, MTBE, ethylene glycol, polycarbonate, ether and fertilizers. It manufactures essential chemicals which are used in all types of materials from packaging to healthcare to household goods. In the fertilizer segment the company is globally number one in export market of Granular Urea. The company also is one of the leading suppliers of agri-nutrients to customers across Middle East, Africa, Asia and Americas to help meet growing food demand. It enjoys strong market position with competitive cost base as the largest as one of the one of the largest diversified chemical companies globally, focusing on petrochemicals, fertilisers and metals, with reported revenues of SAR157.2 billion as of LTM Q2 2019.

2. Strong distribution and presence across major markets globally: SABIC has established a strong global distribution network which has enabled it access to almost all the global markets. The company has manufacturing facilities, compounding hubs, subsidiaries and sales offices and; distribution, storage facilities and logistic hubs across all the continents through which it caters to its customers. It operates 14 crackers globally, with 11 in KSA and 3 in Europe. To complement the extensive production facilities, SABIC enjoys a sprawling commercial and distribution infrastructure to reach a large and diverse customer base, including high growth markets of China and Asia.

3. Focus on innovation and R&D: SABIC as a leader in chemicals has the motto ‘Chemistry that matters’. The company has relentless focus on scientific innovation powered by R&D to stay ahead of the curve. The company produces a wide range of specialty materials and thermoplastic resins which are used in growing range of innovative applications and products. SABIC builds essential chemical building blocks for materials used in a wide array of utilities right from industrial packaging, healthcare to household goods.
The company has key innovation hubs across geographies with a team of more than 1200 scientists and a patent portfolio of more than 11,700 filings as of 2018. SABIC’s Global Application Technology organization is credited for developing over 150 new products every year. One of the recent innovations by SABIC include using its NORYL resin for an all-plastic water filtration module. Italian race and supercar designer and manufacturer Dallara Automobili greatly benefited from Lexan Resin from SABIC’s stable which aided them in shaping exquisite design features while reducing weight ( by about 35%) for their automobiles.

The remaining section of “Strength” is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

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Check Out Analysis of Other Relevant Companies

WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?

1. The SWOT and PESTLE analysis report offers a quick glimpse into the internal and external factors formerly in a matrix format, followed by a detailed analysis
2. The SWOT analysis of SABIC provides a comprehensive analysis of the company's prevalent internal strengths and weaknesses, external opportunities and threats.
3. Comprehend the role of SABIC's core competencies in shaping the Company’s business and presenting the company with a competitive advantage over its competitors
4. The PESTLE/ PESTEL/ STEEPL analysis for an insightful study into the external factors viz, political, economic, social, technological, legal and environmental and highlighting their impression on the chemical industry and specifically on SABIC
5. Renders holistic information about SABlC’s mergers and acquisitions, strategic partnerships and alliances, capital raising, market value, market segmentation and the synergies that were achieved with them.
6. Penetrations into SABIC’s business diversification, extracting its key business segments and elaborate upon its business case study
7. Cognizance of current trends and driving forces of the chemical industry and its influences on SABIC's business and market strategy.
8. A comprehensive company analysis to gain knowledge about company information, company profile, business model, business current and future plans.
9. Understanding of SABIC’s USP or unique selling proposition, mission statement, and vision statement
10. Synopsis of SABIC's business model, business case study along with a peek into the company’s key performance indicators, value proposition, and success factors.
References used in SABIC Analysis Report

1. SABIC Annual Report- https://www.sabic.com/en/investors/performance-financial-highlights/annual-reports

2. SABIC Website- https://www.sabic.com/en

3. SABIC Vision- https://www.sabic.com/en/sustainability

4. SABIC Technology and Innovation Centers- https://www.sabic.com/en/innovation/our-technology-innovation-centers

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Saudi Basic Industries Corporation (SABIC) SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Saudi Basic Industries Corporation (SABIC) SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/sabic/ [Accessed 26 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

Copyrights and Disclaimer

Saudi Basic Industries Corporation (SABIC) SWOT and PESTLE analysis has been conducted by Khushboo Kadmawala and reviewed by senior analysts from Barakaat Consulting.

Copyright of Saudi Basic Industries Corporation (SABIC) SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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Saudi Basic Industries Corporation (SABIC) SWOT & PESTLE Analysis
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